Here we are, once again at the 1.3800 psychological level.  Since testing 1.3725 support in the overnight, the EURUSD currency pair has skyrocketed higher, now trading at 1.3806.  Although further gains may be likely in the long run, they remain contingent on key resistance barriers in the short term.

Initial resistance barriers reside at the obvious session high of 1.3840.  A break above this level would see buying momentum run into formidable levels at the 1.3854 or the 38.2% Fibonacci retracement level from the recent 1.4233-1.3616 bearish decline in the 15-minute timeframe.  The level is being reinforced by looming barriers at the 1.3928 – which is currently formulating a confluence of barriers.  At that level, the 50% Fibonacci retracement of the aforementioned decline is being combined with rising trendline resistance from the inverted flag formation that we took careful note of about a week ago.  This coupling of resistance is likely to remain steadfast, even in the face of fundamentally driven momentum in the short term.

EURUSD 15-minute timeframe – Source:  FXTrek Intellicharts

Further bearish technical support is coming from Stochastics.  The favored oscillators is showing a reading of 49.22, after hitting as high as 86 in the New York session – an indication of oversold conditions.

As a result, given broader evidence, the short term technical bias is towards a slow decline lower in the EURUSD currency.  But, should buyers show some resilience in the afternoon trade, they would need to penetrate the 1.3854 before attempting to place take-profit targets higher up.